Liabilities

Liabilities are present obligations to transfer economic resources arising from past events. They include supplier payables, borrowings, tax obligations, and obligations associated with customer advances.

Receiving cash does not necessarily create revenue. An advance for an unperformed service can create a liability because the company still owes performance.

Odoo account types distinguish payable, current liabilities, and non-current liabilities. Posted bills and configured advance or loan workflows affect these balances, which feed the Balance Sheet.

Down payment account configuration and recognition policy matter: creating an advance invoice alone does not guarantee the appropriate liability treatment.